In an 11-K filing with the Securities and Exchange Commission (SEC), RadioShack Corporation revealed that the Department of Labor is investigating its 401(k) plan.
RadioShack said it received written notification from the DOL on November 14, 2014, that the agency would be conducting an official investigation beginning December 9, to determine if RadioShack’s 401(k) plan was operating in compliance with Title I of the Employee Retirement Income Security Act (ERISA). The letter from the DOL indicated that its review would cover plan years 2011 through the present. The DOL conducted on-sight interviews and review of documents on December 15 and 16.
Though the filing does not say what the DOL is investigating, it mentions that at least three participant lawsuits have been filed alleging breaches of fiduciary duties under ERISA. One lawsuit alleges fiduciaries of RadioShack’s 401(k) plans violated ERISA by failing to disclose the company’s true financial and operating condition to participants and beneficiaries of the plans and/or by offering RadioShack stock as an investment option under the plans when it was not prudent to do so. Also, according to the complaint, at least some of the defendants failed to provide plan participants information necessary to make informed decisions regarding RadioShack stock.
RadioShack, which is floundering financially, has frozen the stock fund to new investments. The company also announced it will stop its contributions to the plan effective February 1.